Employment Judge S KnightIn person for claimantDate 10 May 2021
JUDGMENT
[1]The Respondent breached its contract of employment with the Claimant.[2]The Respondent made an unauthorised deduction from the Claimant’s wages in respect of unpaid holiday pay.[3]The Respondent is to pay the Claimant £1,373.33 composed of:(1)£969.41 for unauthorised deductions from wages; and(2)£403.92 for breach of contract. JUDGMENT having been sent to the parties on 10 May 2021 and reasons having been requested in accordance with Rule 62(3) of the Rules of Procedure 2013.
REASONS
[1]The Claimant was employed by the Respondent as a CAD Technician. He was employed by the Respondent between 20 September 2019 and some later date, which is in dispute, and which the Claimant says was 11 February 2020. The Respondent operates a large joinery business.
The claims
[2]The Claimant brings claims for:(1) Failure to pay notice pay (breach of contract / wrongful dismissal); and(2) Unauthorised deductions from wages. 1 of 6[3]On 19 May 2020 ACAS was notified of the Claimant’s claim under the early conciliation procedure. On 20 May 2020 ACAS issued the early conciliation certificate. On 24 May 2020 the ET1 Claim Form was presented out of time. The Respondent later filed an ET3 Response Form. Procedure, documents, and evidence heard Procedure[4]This has been a remote hearing which has been consented to by the parties. The form of remote hearing was “A: audio whether partly (someone physically in a hearing centre) or fully (all remote)”. A face-to-face hearing was not held because it was not practicable due to the COVID-19 pandemic and no-one requested the same.[5]All participants attended the hearing through telephone conference. Documents[6]I was provided with an agreed Hearing Bundle comprising 143 pages and a Supplementary Bundle comprising 53 pages.[7]Witness statements from the Claimant, Alan Sheehy, and Larry Kearns were provided separately. Evidence[8]At the hearing I heard evidence under oath from the Claimant and Alan Sheehy. The Respondent chose not to call evidence from Larry Kearns. As such, I have given limited weight to his evidence. Each of the witnesses who gave oral evidence adopted their witness statements and added to them. Closing submissions[9]Both parties made oral closing submissions. Relevant law Contracts of employment
Relevant law
[10]Section 230 of the Employment Rights Act 1996 (“ERA 1996) defines “employee” and “contract of employment” as follows: “230.— Employees, workers etc.(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.” 2 of 6[11]In Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance; [1968] 2 Q.B. 497; 8 December 1967 Mackenna J in the High Court considered when a contract was a contract of service (implying employment), and when it was a contract for services (implying self-employment). A contract of service exists if the following three conditions are fulfilled:(i) the servant agrees that in consideration of a wage or other remuneration he will provide his own work and skill in the performance of some service for his master;(ii) he agrees, expressly or impliedly, that in the performance of that service he will be subject to the other's control in a sufficient degree to make that other master; and(iii) the other provisions of the contract are consistent with its being a contract of service.[12]In Autoclenz Limited v Belcher and others [2011] UKSC 41; [2011] 4 All E.R. 745; 27 July 2011 Lord Clarke, giving the judgment of the Supreme Court, made clear that personal performance of the contract is necessary (although not sufficient) to make a contract an employment contract. Unauthorised deductions from wages[13]Sections 13 to 27B ERA 1996 sets out the statutory basis for a claim of unauthorised deduction from wages. Section 13 ERA 1996 provides in particular as follows: “(1) An employer shall not make a deduction from wages of a worker employed by him unless—(a) the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker's contract, or(b) the worker has previously signified in writing his agreement or consent to the making of the deduction. (2) In this section “relevant provision” , in relation to a worker's contract, means a provision of the contract comprised— (a) in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or (b) in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion. (3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion. (4) Subsection (3) does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the 3 of 6 computation by him of the gross amount of the wages properly payable by him to the worker on that occasion. (5) For the purposes of this section a relevant provision of a worker's contract having effect by virtue of a variation of the contract does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the variation took effect. (6) For the purposes of this section an agreement or consent signified by a worker does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the agreement or consent was signified. (7) This section does not affect any other statutory provision by virtue of which a sum payable to a worker by his employer but not constituting “wages” within the meaning of this Part is not to be subject to a deduction at the instance of the employer.”[14]“Wages” is widely defined. According to section 27(1) ERA 1996, it includes “any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise”.
Findings of fact
[15]The Respondent hired the Claimant directly. The Claimant was employed. He had to work at the Respondent’s site, he worked alongside other of the Respondent’s employees, he used only their equipment, all safety equipment was provided by the Respondent, no uniforms were worn by anyone, he had to perform the work himself: he could not ever send a substitute because the Respondent would not allow it.[16]The Respondent moved the Claimant into bogus self-employment. The alleged self-employment was a sham designed to evade the payment of taxes by the Respondent. It was a sham to which the Claimant was not a party, as he did not understand the impact of the Respondent’s actions. The Claimant’s work bore all the hallmarks of employment, rather than self-employment. To call him selfemployed was a nonsense. As Mr Kearns noted in his witness statement, the Respondent is in business to make money. Moving the Claimant to bogus selfemployment was one way of increasing the amount of money made. When, after being dismissed, the Claimant called the Respondent out, by email, the Respondent blocked the Claimant from contact.[17]The Respondent never informed the Claimant what would be involved in selfemployment. In particular, it did not tell him that he would be responsible for paying his own income tax and NI contributions, and would not receive pension contributions. It gave him every impression that he was on what amounted to a zero-hours contract. There was nothing that would suggest that this was a selfemployment scenario other than the Respondent’s bogus use of the term and failure to pay the taxes it was required to pay. The contract that the Claimant signed with a third-party, ATL, was at the insistence of the Respondent, and the Claimant simply understood that the terms in that contract which ousted his 4 of 6 employment rights ousted them in respect of ATL, not the Respondent. 18. 11 February 2020 was the last day of work for the Claimant. At that point he had saved up 12 days of leave. He was given no notice of his dismissal by the Respondent. Indeed, he was not even given notice that he was actually being dismissed, because the Respondent wanted to maintain the illusion that the Claimant had been self-employed. The Respondent simply stopped giving the Claimant work.[19]The Claimant’s contractual weekly gross wage, which was still applicable at the time of his dismissal, was £673.20. He was sometimes paid less than this partly because of the bogus self-employment scenario. However, the Claimant was only working 3/5 of a week at the time of his dismissal. Conclusions Preliminary issue: time limits
Conclusions
[20]There was a preliminary issue about whether the claims were brought in time.[21]The Claimant’s employment ended on 11 February 2020. ACAS were approached more than 3 months later. His ET1 claim form was filed on 24 May 2020. As such, the claim was filed more than 3 months after dismissal. The claims were out of time.[22]The Claimant was rendered destitute by the Respondent’s actions. He suffered from depression. His motivation and indeed ability to take legal action was thereby sapped. The impact of depression on a person’s actual ability, let alone reasonable practicability, to perform tasks like filing an ET claim should not be underestimated. It plainly was not reasonably practicable for him to bring the claims in time.[23]However, the Claimant brought the claim as soon as he reasonably could, when he had the support to be able to do so. The claims were brought within a reasonable period once it became practicable to do so.[24]As such I extend time to the extent necessary for the Claimant to bring his claims. Liability[25]The entirety of the self-employment was a fiction. As such, the Claimant was employed until the termination of his employment on 11 February 2020. He was entitled to a week’s notice. That was not paid. As such, the Respondent was in breach of contract and made an unauthorised deduction from wages by failing to pay notice pay.[26]Whether or not the self-employment was a fiction, the Respondent’s own documentation indicated that the Claimant was owed 12 days’ holiday at the conclusion of his employment. The Respondent did not pay the Claimant for those 12 days. The Respondent made an unauthorised deduction from wages by failing to pay holiday pay. 5 of 6
Remedy
[27]The Claimant was paid £403.92 for the 3/5 of each week he worked.[28]As such, he was entitled to £403.92 notice pay.[29]The Claimant had 2.4 weeks’ unpaid holiday pay at dismissal. As such, he was entitled to £969.41 holiday pay.[30]The Respondent will be ordered to pay the Claimant £1,373.33.